Executive Summary
Tourism is one of the critical aspects of a country’s economic growth. It is a vital component that contributes to sustainable development and global recognition. Over the years, the tourism industry in the United Arab Emirates (UAE) has undergone a massive change with the introduction of new initiatives and strategies. The governing body is now keen on capitalising on the country’s potential in the tourism industry.
It is continually working on improving its infrastructure and facilities to encourage the onset of new businesses in the industry. The Arab nation is flourishing with emerging business ventures that bring in innovations and cutting-edge solutions to overcome the problems persisting in the industry. With more investment in the infrastructure and transportation facilities, the UAE is aiming to become one of the global leaders in the tourism industry.
Each emirate has transformed massively to become a prominent destination for tourism. The country has some of the best tourist attractions and locations that bring in visitors from across the globe. Also, recently the middle east nation has started hosting a variety of events on an international level. These events are a great way to gather worldwide attention, thereby increasing the UAE’s global reputation. Visitors are mainly drawn towards sporting events, entertainment and mesmerising infrastructures.
At present, travel to the UAE is not just limited to leisure but also for various business activities. The number of business travellers to the country has grown over the past few years, owing to its business-friendly ecosystem. Investors and entrepreneurs are opting for business setup in the popular business hubs of the country. It would significantly increase the inflow of international clients and foreign investors. With growing opportunities in the tourism industry, it is sensible to start a tourism business in the UAE.
Introduction: Tourism in the UAE
Overview
Tourism in UAE has been under massive expansion ever since the formation of the Emirates. The industry provides a significant contribution to the goal of building a diversified economy. It has been made possible through elaborated efforts towards promoting its tourism capabilities worldwide. This section highlights the efforts made by the country in the early days and how it led to the flourishing of the industry. Also, it details the economic and cultural emphasis of tourism and its impact on the business aspects
History of Tourism
UAE was once known as a small trading hub with a majority of its businesses limited to oil and petroleum. However, after the early speculations that the country would eventually run out of its petroleum resources, special efforts were made to diversify its economy. Tourism was foreseen as a potential opportunity for economic growth.
It led to the formation of the Dubai Commerce and Tourism Promotion Board in 1989. The board was formed with a vision to promote the Emirates as a luxury destination with a rich culture and heritage. It was later reformed as the Department of Tourism and Commerce Marketing (DTCM). Dubai was estimated to be the ideal destination for tourist attraction. However, other emirates such as Abu Dhabi and Sharjah also gained worldwide attention as one of the leading tourist destinations in the world.
Economical Impact
The economy of the UAE has been steady with sustainable growth in the last few decades. Tourism has been a major contributing factor to economic growth. The country has recorded millions of tourists annually owing to its advanced infrastructures. Since the early days of expansion, UAE authorities have been investing heavily on support and beautification of the commercial properties. Tourism has contributed significantly to the country’s financial growth with Dubai being the fifth most popular holiday destination in the world. Dubai holds a majority of shares in UAE’s tourism economy.
Business opportunities
UAE offers a wide range of business opportunities in the tourism industry. Much of this success has been a result of providing a better traveller experience for its visitors. There are various types of businesses that operate in the tourism sector with different roles such as providing accommodation, transportation, consultants, guided tours, luggage handling and event management. Some of the key business opportunities in the UAE include:
Lodging
It is perhaps the backbone of the travel industry. With a high inflow of visitors, accommodation is one of the primary requirements. There are numerous hotels and resorts in the country that can accommodate a significant amount of travellers. However, the need for more lodging facilities is expected with an increase in tourism activity.
Tour guides
Guided tours are an essential part of tourist activity. It garnished the right amount of profits which makes it a suitable business option. Businesses can offer a wide range of tour packages based on interest and popularity.
- Shopping
Shopping is inevitably a popular business choice as it has a higher demand throughout the year. Many people visit the emirates for memorable shopping experiences. Dubai, primarily, is known as the world’s most famous shopping centre.
- Event organisation: Planning and managing events are profitable business solutions, as the number of events held in the UAE has increased over the past few years. There is an increasing demand for qualified professional services in the events sector.
- Transportation: World-class transportation services are always in demand. There are a lot of new startups providing cheaper transit options such as shared and rental rides. With vast scope lying in the transportation business, more businesses are expected to emerge soon.
Tourism development
Overview
The development of the tourism industry in the UAE has shown some interesting trends in the last few decades. There are various ambitious projects planned for the future to make the industry one of the key contributors to a sustainable economy. This section highlights some key trends in the travel industry with brief information about tourist behaviour over the years and expected market growth.
General trends
Ever since its inception, the tourism industry has been under massive expansion. It is projected to increase its overall contribution to the country’s GDP by 2026. The figure below shows the contribution of tourism to the domestic market of the UAE.
Tourist behaviour
The number of visitors to the country has been on the rise over the last few years. The interest and popularity of tourist destinations have shown a significant amount of growth among travellers. Below image depicts the inflow of travellers in the UAE from various other countries.
Market Growth
As mentioned before, the market growth of the tourism sector has continuously been improving with more investments. The government is investing to make tourism one of its vital industry. The figure below shows the amount of spending carried out over the years in the tourism sector.
Tourism Industry in UAE
Tourist attractions
The Arab nation is bestowed with some mesmerising tourist attractions. It has some of the most pristine locations which are idle for visitors. The top destinations in the UAE such as Burj Khalifa, Sheik Zayad Mosque, Palm Jumeirah and Sharjah Art Museum are great examples of historical and modern infrastructure. Other than monuments and skyscrapers, one can also enjoy the serene beauty of Khalifa Park which composes of attractions such as waterfalls, amusement parks and aquariums. The Jebel Hebbat mountain gives a panoramic view of desserts along with housing Green Mubazzarah in its foothill. In addition to those mentioned above, there are plenty of other destinations such as dunes, valleys and beaches.
Luxury tourism
The UAE’s hospitality industry has experienced tremendous growth in the last few decades. The surge has been a result of increased inflow of tourists mainly from India, Russia, China and European countries. Several luxury hotels have been established to accommodate tourists. There has been a lot of emphasis on providing visitors with world-class facilities and amenities. The luxury experience has been a significant factor in the growth of the hospitality and tourism industry. Moreover, the country is also known for providing the best shopping experience.
Dubai is often referred to as the shopping capital of the world. The shopping centres here are diverse with a variety of products. Also, these centres host significant franchises that have worldwide popularity. The shopping experience in the Arab nation is a rewarding one with a wide range of choices and products. Tourists get attracted to some unique variety of products which are exclusive to the UAE market.
Health tourism
With economic diversification, the emirates have been focusing on different industries other than petroleum. Healthcare is one of the major industries in the UAE. Over the years, the country has established numerous hospitals and healthcare facilities. People from across the world visit the country for health treatments and medical requirements. The emirates have keenly focused on the development of cutting-edge technologies and advanced infrastructure for better healthcare facilities. It has been continuously promoting healthcare across its emirates to ensure a healthy future for its citizens.
The UAE citizens and residents receive a host of benefits through government schemes relating to health and wellness. Some social events are organised regularly to spread awareness about medical conditions and disorders. Organisations and non-profits have equal contribution to the healthcare industry. Medical tourism, as a result, has emerged as a popular choice for travellers looking to visit the country for health-related purposes.
Sports tourism
Sporting events have been a major attraction for tourists. UAE provides fans and sports enthusiasts with spectacular events. One of the most prominent events is the Dubai World Cup which is known to be the richest horse race in the world. It is a widely popular sport that attracts worldwide attention.
In addition to horse racing, there are many other sports as well such as cricket, martial arts, motorsports and football. UFC 242, one of the most popular sporting events, was held in Abu Dhabi. It brought some of the biggest names in sports entertainment under one roof for a spectacular showcase. The Sharjah Cricket Stadium has hosted some of the best international cricket matches of the decade. Other notable sporting events include camel racing, golf, tennis, polo, rugby, rock climbing, ice-skating, chess archery and water sports.
Eco-Tourism
The Arab nation is bestowed with some of the most beautiful natural landscapes. The territory is enriched with natural attractions such as sand dunes, oases, mountains, valleys, beaches, mangroves and salt plain. Eco-tourism has become a lot more popular with great emphasis on activities such as desert safari, mountain climbing, camping and underwater seascapes. The country is also famous for its rich flora and fauna.
There are natural reserves such as Marawah Marine Biosphere Reserve and Ras Al Khor Wildlife Sanctuary, which adds to the beauty of eco-tourism. Exploring nature has been a trend which is quite popular among visitors. The natural landscapes thereby make the emirates more tourist-friendly.
Entertainment
Some of the most exciting events and adventures can be discovered in the Arab nations. The various emirates of the UAE host multiple theme parks. These theme parks draw a lot of attention to activities and games. There are also some water parks which are best suited for friends and family outings. Most of the theme parks in the UAE are family-friendly and provides memorable experiences.
In addition to parks, several exhibitions are also conducted on a quarterly, half-yearly or annual basis. These exhibitions are different from the regular ones and provide a whole new experience for the attendees. Lately, there has been the introduction of more unique shopping concepts to make it more interesting. The resorts and luxury are also making minor changes to integrate fun activities to help tourists make the most out of their stays.
Business travel
Being one of the leading business destinations, UAE provides some of the best business travel experiences. Its geographical location serves as the connectivity between eastern and western countries. It makes business travel easier for travellers visiting UAE for various business-related purposes.
Tourism business in UAE
Overview
Establishing a tourism business in UAE can be challenging without proper knowledge of the procedures and regulations. This section will provide a detailed explanation of the company registration requirements and procedures. Also, it highlights the key reasons for investing in the tourism industry. Once a company gets registered, there are various other aspects such as tax requirements, government policies, business location and market conditions that impact the sustainability of the tourism industry.
Why invest in the Tourism business?
Tourism is an ever-growing industry which will always have a bright future in terms of profitability and sustainment. When it comes to UAE, it is the most pristine and visitor-friendly nations. The following are some of the reasons for investing in the tourism industry in the UAE:
- Profitability: Investing in the tourism business will lead to higher revenue generation. This industry provides scope for better profitability and business expansion.
- Growth prospects: Tourism has an exponential growth rate and is considered as a fast-paced industry. Constant growth ensures the stability of business in the long run.
- No special requirements: Starting a tourism business does not require special skills or educational background. It can be established with fundamental business knowledge and dedication.
- Support: The UAE governing authorities provide support to emerging ventures in the tourism and hospitality industry. There has been many promotions and initiatives undertaken by the government to encourage business owners and entrepreneurs.
- Expanding Market: The tourism marketplace is rapidly growing, with an increase in visitor inflow. The massive number of international travellers to the country is one of the primary reasons that can help in the expansion of business in the tourism industry.
Starting a Tourism business
The following are the steps for tourism business setup in UAE:
- The first step is to select the type of tourism business. It mainly depends on the kind of activity that will be carried out by the company. The different types of tourism business may include a travel agency, hospitality, transportation or destination management.
- The next step is to obtain a tourism license from the concerned authorities. The permit may differ based on the location where it is received.
- After obtaining the business license, the next thing would be to establish a company which requires building a strategic plan and attesting required documents.
- UAE offers different options for setting up a business. Business owners have to choose the type of business they would like to establish. There are mainly two types of business for tourism, namely Freezone and Mainland.
- Once a location is selected, the remaining formalities have to be completed along with registering a proper trade name.
- Regulatory authorities would verify all documents. The required documents must be carefully examined before submission.
- After the verification of documents, the documents should be submitted for approval by the concerned authorities for further processing of the documentation.
- Once the documentation process is completed, then the required fee for business registration should be paid to successfully register the tourism business.
Conclusion
The tourism industry in the UAE is increasing, and its various activities directly help in different developmental processes. Sustainable tourism development has a tremendous impact on local culture and social welfare. It supports revenue generations and employment opportunities for local citizens. There are various business opportunities available in the industry with vast scope for technological advancement. Several new businesses are emerging in the UAE, and it is perhaps the best time to invest in the tourism industry.